Photo by UK Property Market Update: Trends and Challenges Ahead
The UK property market has experienced significant changes in recent years, and new trends are emerging. Holiday let deals are on the rise, with 445 mortgage options available to borrowers, up from 362 in August 2023. However, challenges lie ahead, with tax changes expected to abolish the tax advantages for furnished holiday lettings from April 2025.
The Rise of Holiday Let Deals
According to analysis by Moneyfactscompare, the number of lenders in the holiday let market has increased, with 34 lenders currently offering mortgage options. Building societies make up the majority of these lenders. This growth is encouraging, but the demand and profitability of holiday lets must be weighed up against the expected tax changes.
Tax Changes Ahead
From April 2025, tax rules for furnished holiday lettings will change to align with those for other property businesses. These changes will undoubtedly impact both existing and prospective landlords. It is crucial for new investors to conduct thorough research and seek advice from a listings service to navigate these changes.
Buy-to-Let Market Update
The buy-to-let market has also seen significant changes, with rising interest rates and tax perks being quashed. However, some lenders are now reducing rates on their buy-to-let product ranges. Accord Mortgages, for example, has reduced rates by up to 0.20% across all loan-to-values up to 75%. Other lenders, such as The Mortgage Works and Landbay, have also cut selected buy-to-let rates.
Labour’s Freedom to Buy Scheme
The Labour Government’s plans for a Freedom to Buy mortgage guarantee scheme have raised doubts among experts. Analysis by Quilter has revealed that the number of people between the ages of 18 and 30 securing a mortgage each year has risen relatively steadily in the last decade, but has been trending downwards since 2021. The scheme aims to support first-time buyers, but critics argue that it does not address the fundamental issue of high property prices relative to average incomes.
Conclusion
The UK property market is facing significant challenges ahead, from tax changes to rising interest rates. However, there are also opportunities emerging, such as the growth of holiday let deals and the reduction of buy-to-let rates. As the market continues to evolve, it is essential for investors and landlords to stay informed and adapt to the changing landscape.
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